Align tax savings with financial goals, risk appetite, liquidity needs
With barely two-and-a-half months left before the financial year ends, the window for effective tax planning is closing fast. For investors who have opted for the old tax regime, this period often triggers a rush to complete tax-saving investments. But experts warn that purely deduction-driven, last-minute decisions can have lasting financial consequences.
Key considerations
The first step is to determine whether the old tax regime is truly beneficial for you. “Often, taxpayers lock themselves into unnecessary products just to cut taxes. Sensible tax planning should strengthen financial discipline and long-term financial stability, not undermine it,” says Vishwas Panjari, founder, SVAS Business Advisors.
Public Provident Fund (PPF)
PPF is a government-backed, long-term savings scheme that offers capital protection and a return of 7.1 per cent. “It enjoys exempt-exempt-exempt (EEE) tax status, with contributions eligible for Section 80C deduction and interest income being tax-free on maturity,” says Sanjoli Maheshwari, executive director, Nangia & Co.
She adds that with a 15-year lock-in and limited liquidity, PPF suits conservative investors seeking low-risk, tax-efficient, long-term savings.
Publication – Business Standard
By Sanjoli Maheshwari
Leave a Reply